A high rise development will save the YMCA homeless hostel and flats from closure.
A ‘land swap’ deal between the charity, the council and MKDP has this week been agreed.
It involves demolishing the existing facility and building a new high rise YMCA on half the city centre space.
The other half will be used for an eight-storey high block of 250 private apartments.
“The apartment development will fund the building of the new YMCA and make its future secure,” said council leader Pete Marland.
Less than 18 months ago his council plunged the YMCA night shelter into jeopardy by proposing to cut its £194,000-a-year funding.
Mr Marland said: “We face tough financial times. But this is a good deal that will meet housing needs in CMK.”